However energy produced from coal seam gas may not be cheaper for consumers and conservationists and farmers still remain concerned about the impact of the new resource.

Inside the Darling Downs Power Station

Currently only about 15 per cent of Queensland's peak energy supplies comes from gas, the remaining 75 per cent being produced by coal-fired power stations.

However this rate is hoped to shortly increase to 18 per cent.

Origin Energy's new power plant produces power through three 120 megawatt gas turbines and one 270 megawatt steam turbine, which together are capable of producing 630 megawatts of electricity.

The coal seam gas comes from gas fields at Wallumbilla near Roma and is transported to the plant through a 205 kilometre pipeline.

The plant produces about 10 per cent of Queensland's baseload electricity usage, and with two other power stations nearby, they provide close to 20 per cent of Queensland's electricity.

Energy and water efficiency

The plant - which has been operating since July 1 - recycles water by cooling the turbine steam used to generate power and put it back into the energy plant.

As a result it uses about three per cent of the water used by a traditional coal power station.

Origin Energy's managing director Grant King said the station was also extremely efficient.

"It is nearly twice as good as a coal-fired power station," Mr King said.

"If you take the amount of fuel in and talk about how much energy comes out, about 55 per cent of the fuel going in comes out as electricity," he said.

"In a more traditional open cycle gas turbine plant or a coal-fired power station, that figure would be about 25 to 30 per cent of the fuel in that comes out as useful electricity."

No guarantee of smaller bills

Mr King said while the Darling Downs Power Station produced energy for a competitive price, he could not say if it would results in cheaper electricity bills for consumers.

Electricity produced at Dalby goes straight to the national electricity grid and electricity prices are set by the Queensland Competition Authority, he said.

However, he said the plant had shown greener technology could compete with traditionally cheaper, less environmentally-friendly rivals.

"The technology itself does come at a cost to produce the environmental efficiency, but not at any great cost. This plant is as competitive as any traditional coal-fired coal plant.

"And I think that is an important demonstration that we can build this sort of technology and operate in a competitive market with old technology."

The Premier was also pushing the new station's green credentials yesterday, arguing the use of methane gas from underground coal seams was low carbon source of power.

"Given the carbon uncertainties going forward I expect to see that we will probably power most of our new energy supplies by gas coming out of this region," she said.

Environmental impact

Although the government has touted coal seam gas as a greener power source, many environmentalists remain unconvinced.

The Queensland Conservation Council questions whether coal seam gas has a lower greenhouse impact because methane from coal seams has a higher impact than carbon dioxide from coal.

Toby Hutcheon, executive director of the Queensland Conservation Council, wrote in brisbanetimes.com.au yesterday that the gas extraction process "could mean the contamination of aquifers and the removal of too much water from underground storages".

He added: "The coal gas seam industry has estimated the need for about 40,000 wells to be drilled to extract gas on the Darling Downs.

"This could significantly weaken the rock below the ground. The mass of necessary pipelines between wells, gas fields and distribution points will also disturb farming and the environment."

"Mining and farming have had to find a way to co-exist in Queensland ever since we started developing this state," she said.

"And there are hurdles in the coal seam gas area. There are concerns that are legitimate from our farming community, but I am very confident that we will resolve them."

Local impact

Ms Bligh said royalties will allow the State Government to fund extra schools and community resources as the Dalby Condamine River region's population grows.

"These are communities which have suffered population decline for decades. They are now on the cusp of the biggest growth in prosperity that they have seen in the history."

But she urged the Federal Government to look strongly at improving the Warrego Highway.

"Upgrading the Warrego Highway, in my view, has to be one of the number one priorities of the Federal Government," she said.

"It is national highway that is about to become a major freight route and it is critical to the growth of this industry."

7 comments so far

There's a very big chance that chemical extraction of coal seam gas could be the biggest environmental disaster to ever befall Queensland.

Commenter

LuckyCountry

Location

Southport

Date and time

November 06, 2010, 11:39AM

@LuckyCountry.....Got any evidence to back up your wild statement ?

Commenter

My20cents

Location

SEQLD

Date and time

November 07, 2010, 8:30AM

Want to be a Great Big Gas in the rural sector...try this emerging market tip...Plant Yippee Beans.

Commenter

Bob Lansdowne

Location

A to Zee

Date and time

November 07, 2010, 9:11AM

My20cents: the real question should be is there any evidence that it's safe?

The impact in America has been disastrous: farmers passing out in their fields, tap water becoming flammable and injection of heavy metals into aquifers resulting in high rates of cancers.

Add to that the damage of trucks on the delicate soils in the Darling Downs and that there's a very real chance the port at Gladstone will wipe out Australia's only endemic species of dolphin.

Also, converting coal seam gas to LNG is just as greenhouse-gas intensive as burning coal. The plants proposed for Western Australia are expected to double WA's greenhouse gas emissions and make up 5% of Australia's total emissions. How the government plans to reduce emissions while encouraging this sort of development is beyond me.

Commenter

Matt

Location

Brisbane

Date and time

November 07, 2010, 9:30AM

I don't quite understand the connection or disconnection of whilst requiring only 3% of traditional water usage might/could/perhaps equal removal of too much water from the underground storage? What water is used traditionally? _The approx usage of 55% from raw fuels compared to 25-30% has to be a plus, coupled with being almost twice as efficient as traditional and having a low carbon source of power, has grabbed my attention. _On paper, the proposition looks very appealing and hopefully it will be thoroughly examined. So long as it doesn't become a political mockery such as Abbott is currently doing Federally, to his eternal shame and disgrace.

Commenter

John

Location

Rochedale

Date and time

November 07, 2010, 11:06AM

Wow efficency of 55%(theoretical)_Why have those we pay afortune to in the Public Service look up some information on Trigeneration.Try over 80%._Part of the CBD in London is now off the Grid._The person who did this, Allan Jones is now advising Sydney City Council._Where the intellect and vision?

Commenter

What AGas

Location

Brisbane

Date and time

November 07, 2010, 11:18AM

How about upgrading the rail line and using that??

I noted the coal seam gas pipes going out west before the big announcement. All a charade really.